Beyer Introduces Legislation To Add Consumer Protections For Digital Asset Markets
Washington, September 28, 2023
U.S. Representative Don Beyer (D-VA) today announced the introduction of the Off-Chain Digital Commodity Transaction Reporting Act, legislation that would protect participants in the digital asset market by requiring trading platforms to report all transactions to a repository registered with the Commodity Futures Trading Commission (CFTC).
“As consumers increasingly turn to large digital asset trading platforms to conduct their business, thousands of transactions each day are conducted off the publicly verifiable blockchain,” said Rep. Beyer. “Unfortunately, internal record keeping among these private entities can vary wildly, and this can leave investors and consumers vulnerable to fraud and manipulation. This bill is a common-sense measure to restore some transparency and confidence to the digital asset market.”
In theory, the blockchain technology that undergirds the digital asset market provides security, traceability, and transparency to market participants as all transactions are publicly available and validated by a decentralized network outside the control of any single actor. However, with the emergence of trading platforms and a desire to increase transaction times and lower costs, thousands of transactions occur “off-chain” each day and are unrecorded on the publicly viewable blockchain. Many platforms maintain internal private ledgers that track transactions, but these records can be of varying quality. Discrepancies can lead to disputes, manipulation, or fraud.
This legislation would require that all off-chain digital asset transactions be reported within 24 hours to a CFTC-registered trade repository, similar to the requirements for virtually all securities and swaps transactions.
Text of the bill is available here.